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Capgemin
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C O N S UlT l N G .TEC H N O L O G Y . 0 U T S O U R C I N G
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World RetailBanking Report 2016
Preface
This year,as we have for the past five,we polled thousands of retail banking customers
around the world to gauge their attitudes toward their financial service providers. The
most startling insights to emerge from this-survey-the largest of its kind in theindustry-have to do with the undeniable inroads fintech firms are carving into banking's
core businesses.
While fintech firms have been picking away at market share for some time,the nature of
banking-highly regulated and deep-pocketed- has muted their impact. Our survey
indicates that a tipping point is imminent, with fintech firms beginning to win
overwhelming favor with customers compared to the entrenched banking industry. Tum to
Chapter 2 of our report to find further details of how fintechs are attracting referrals, new
customers, and even trust at
a stunningly high rate.
Strategies that banks have traditionally employed to attract and retain customers are
not proving strong enough against the emboldened fintech competition. We know this
because a marked improvement in our Customer Experience Index (CEI) in 2016 failed to
translate into greater levels of profitable customer behavior.See Chapter 1 of our report to
find out how generally high levels of customer experience have resulted in only
marginal improvements in measures like customer retention and referrals.
Especially strikingwas the finding that only 15.9% of customers said they would buy
additional products from their bank. Clearly,the ingenuity and creativity that fintech firms
are bringing
to product development are starting to have an impact. Customers' expectations are also
augmented by the superior experience they are receiving with the technology intheir dayto day life.Customers are expecting much more inthe way of innovation, but are not
getting it from their banks.
In the face of increasingly aggressive fintech competition, banks know they need to do more
than just improve the customer experience. Tum to Chapter 3 to find out the accelerated
rate with which banks are now looking to partner with fintech firms. Partnering not only
empowers banks in product development, but gives them a strong voice in defining the
future of the digital banking ecosystem. Chapter 3 also outlines why banks need to think
big-Interms of revampingtheir core systems and establishing a core competency in
application programming interface (APl)-based software-development-to support their
ambitions in partnering with fintech firms.
There is little doubt that fintech is a game-changer.Banks have begun accepting that
reality, but still need to move much more forcefully toward cementing their place in a more
interconnected digital financialecosystem. We have designed our report with the aim of
making it easy for you to find answers to your biggest questions, as you navigate this
dynamic environment. We hope you find it useful.
Anirban Bose
Head, Global Banking & Financial
Services Capgemini (FS SBU)
Vincent Bastid
Secretary
General Efma
Executive Summary
I.
Customer Experience Rises, but Not Enough to Greatly Improve

Profitable Customer Behavior
a. Retail banks improved their position on Capgeminl's Customer Experience Index by

2.9 points, registering advances across broad portions of the globe and through
every channel. Banks in more than 85% of countries improved customer
experience,with gains being highest in Central and Western Europe.
b. Younger customers registered lower levels of customer experience,raising
concerns about the ability of banks to meet the higher expectations of this
important segment. In nearly every region, Gen Y customers scored lower on
the CEIthan Gen X customers, who in turn scored lower thanother age groups.
c. Despite the overall rise in CEI,profitable customer behavior improved only
marginally, and was especially low in terms of additional purchases, pointing to
the need for banks to continue to improve the customer experience,especially
through more innovative product development.
II.
Fintech Firms Gain Prominence
a. Nearly two-thirds of customers globally said they are using products or services
from fintech firms, giving weight to the threat that banks may become
disintermediatedfrom their customers.
b. While customers have more complete trust in their banks, fintech firms are
making gains; 87.9% or more of customers across all regions somewhat or
completely trust their fintech providers.
c. Fintech firms are making positive impressions, causing customers to be much
more likely to refer their fintech provider (54.9%) compared to their bank
(38.4%).
d. Less than one-quarter of banks said they have an advantage over fintech firms
in their ability to innovate or move nimbly.
Ill. Fintech Partnerships Will Define the Future of Banking
a. The vast majority of banks (87.1%) believe their infrastructures are not
adequate to support the digital banking ecosystem of the future, giving
momentum to the increasingly aggressive competition from fintech firms.
b. Nearly two-thirds of banks view partnerships as the most effective way of
responding to the growing fintech threat.
c. To get the most from their fintech partnerships, banks will need to embrace APls
and begin laying the groundwork to revamp their core systems.
d. Banks will need to navigate the transition to fintech partnerships and APl-based
software development with care,to ensure they remain relevant inthe evolving
digital banking ecosystem and integral to customer relationships.
Introduction - Evolving Toward

a Digital Banking Ecosystem
The comprehensive survey data in this report, gathered from polls of 16,000 customers
in 32 countries, as well as over 140 industry executives around the world, is designed to
assist banks in understanding the current competitive landscape and mapping out their
strategic responses.The information in this report will help banks to:
Our annual rankings of global customer experience allows executives to track bank performance by individual country over time. Major shifts in
Assess current
levels of
customer
experience
Globally,banking industry
witnessed an increase inthe CEIby 2.9 points, with improvements occurring in 85% of the countries surveyed. This ove
Determine
the impact of
improved customer
experience
The rise of fintech firms is undeniable,but just how widespread is its reach? We found nearly two-thirds of customers are usingfintech products or
Gauge the true
influence of
fintech
competitors
Banks overwhelmingly agree that their core systems are not able to support the coming
evolution of banking into
anstock
inter-connected
digitalfinancialservices ecosystem.In response, they are exploring new approaches to innovation invo
Take
of
their ability to
manage the
fintech threat
Get up tothe
speed
Severalbanks are embracing
open architecture of APls to ensure ongoing dialogue with
the most
leading-edge fintech on
product
developers.They are also exploring pathways to transforming their core systems,which will be fundamental to prep
effective
responses to
flntech's advance
Retailbanks have been eyeingthe steady advance of fintech competitors for some time
now. With fintech's momentum gaining, there is greater need than ever before for banks to
develop an action plan that ensures them a centralrole in anincreasingly digital and
interconnected world.Please refer to the data and insights gathered in this report as an
aid in devising your strategic response in this increasingly competitive terrain.
World Retail Banking Report 2016
Key Findings
The Capgemini Customer Experience Index showed marked
improvement in 2016, drawing momentum from almost all regions of
the globe.
More than 85% of countries witnessed an increase in their CEIscores,
with the largest gains occurring in Japan, Netherlands, and Sweden.
Latin America, pulled down by the performance of Mexico and
Argentina, was the only region to experience a decline in CEI.
The ranking of the top-five countries based on CEIshifted signif icantly,
with Netherlands, United Kingdom, and Switzerland making large leaps,
edging out the United States.
Levels of positive customer experience shifted by varying degrees
around the globe, depending on geography, demographics, and
channel usage.
European banks, likely tapping into pent-up demand for consumer credit,
were the most successful at boosting positive customer exper ience.
Gen Y and Gen X customers emerged as areas of concern, given
their lower levels of positive experience.
Customers reported growth in positive exper iences through every channel, with mobi
Customers with positive experiences were significantly more likely to
have higher trust in their primary bank (71.0%}, versus 32.0% of those
with negative experiences.
Despite the overall rise in CEI, profitable customer behavior
improved only marginally.
Only 55.1% of customers said they are likely to stay with their bank for
the next six months, an increase of 1.4 percentage points.
Only 38.4% of respondents, up by 1.0 points, said they would refer
their bank to a friend or family member.
Only 15.9% of customers said they are likely to purchase another
product from their bank, pointing to the need for more innovative
product development.
Customer Experience Trends

Upward
The increase in CEIwas broad-based, occurring

even in countries that traditionally have had
average or poor
Customer Experience Index scores. Japan, long a sub-par
performer, had the highest increase in CEI (7.5 points),
fueled by significant improvement in the ability to meet
customer expectations for accounts (9.5 points). While
Japanese banks are increasingly meeting the needs of
customers seeking digital solutions-the mobile-only Jibun
Bank is one example-they also cater to the risk-averse
Japanese populace through more traditionalbranch
and ATM banking.1
Since 2011,Capgeminihas delivered insight into the

attitudes and behaviors of retail banking customers
around the world throughits proprietary Customer
Experience Index. The most comprehensive survey of
its kind, the CEIthis year polled more than 16,000
customers in 32 countries on their experiences
across 80 different touch points. The resulting data
offers a granular, multi dimensional perspective of how
well retailbanks around the globe are meeting the
expectations of different types of customers across the
full range of products, channels, and lifecycles.
Banks inthe digitally saturated Netherlands market

also witnessed a significant uptick in CEI(by 7.0
points).This increase,driven by improvements in
meeting expectations for credit cards (9.3 points) and
loans (9.0 points), caused Netherlands to shoot up in
the country rankings from 17th to second place,just
behind first-place Canada. Dutch banks, which have
closed hundreds of physical outlets in recent years,
have been among the most successfulat delivering
advanced digital capabilities supplemented by more
streamlined branch networks.2
From 2015 to 2016, the CEIrose by 2.9 points, likely

due to investments made by banks in enhancing
their digital capabilities over the last couple of years.
Customers in more than 85% of countries surveyed
indicated their banking experiences had improved
over the last year, driving the overall CEIfrom 72.7 to
75.6 (see Figure 1.1). In only four countries did
customers say their experiences had deteriorated.
Figure 1.1:Customer Experience Index,Top and Bottom 5 Countries based on CEI,2015-2016
e
o
2016
Countries
01
14
01
Top 5
2016
2015
O!
Netherlands
Czech Republic
80.9
78.9
80.4
73.4
80.4
77.5
Spain
31
UAE
13
2016
2015
Canada
Countries
Bottoms
02
65.3
73.7
Changein Rank based on CEI,2015-2016
1
80.2
73.9
80.0
73.7
28
Argentina
07
68.4
76.4
Improvement
Switzerland
Japan
Mexico
31
66.6
61.7
U.K.
69.4
61.9
No Change
03
69.4
76.8
Deterioration
Note:
Country boundaries on ciagram are approximate andrepresentative only
Source: CapgeminiFr1ancialServices Analysis, 2016; 2016 RetailBanking Voiceof the CustomerSurvey, CapgeminiGlobal FinErlciaJ SeMCes
"With Branches Frt for Bend Movie, Japan Shuns Mobile Banking, Gareth Allen and Shingo Kawamoto,BloombergBusiness,
September 7, 2015, accessed March 2016 at http://www.bloomberg .com/news/articles/2015-Qg.Q7/with-branches-fit-for-a-bondmovie-japanese-shun mobile-banking
2
"Branch bankingin the Netherlands: seamlesslyintegrating physicalwith digital',Bankingandlnsurance, Sia Partners, January
14, 2015, accessed March 2016 at http://en.f inance.sia-partners.com/20150114/branch-banking-in-the-netherlands-seamlesslyintegrating-physical with-digital
Sweden also witnessed an improvement in CEI by

7.0 points, primarily due to an improvement In meeting
customer expectations for mortgages (8.7 points).
Swedish banks are increasingly tapping into social
media to further enrich their Interactions with
customers.
At the other end of the spectrum, declines in CEI
were concentrated in Latin America,where weak
economic growth has likely soured customer
sentiment. Mexico recorded the second-highest fall
in CEIwith a drop of
8.0 points, largely due to a decline of 9.0 points in
meeting customer expectations for accounts. The drop
caused Mexico to plunge inthe country rankings from
seventh place to a near-bottom 30th. Argentina
dropped even more precipitously, from third place to
28th, following
a decline of 7.4 points in its CEI. Argentinean banks
fared worse in meeting customer expectations
across all four product lines-accounts, credit cards,
loans,
and mortgages.
The largest decline in CEIoccurred in Spain,
where the index fell by 8.4 points, dragged down
by inferior performance across all four types of
products. The
decline caused Spainto fall to the very last position in
the country ranking (32), from 13111 The only other
country
to experience a decline in CEIwas Singapore,
which recorded a modest fall of 0.4 points,
putting it in the bottom fourth of the country
rankings.
One of the few consistencies inthe country rankings

from 2015 to 2016 was that Canada retained its No.1
spot. Along with Netherlands, the United Kingdom
and Switzerland made large leaps to claim top-five
positions, edging out the United States, which moved
from 5th to 6th, and pushing Czech Republic from
second to third. The bottom third of the rankings also
shifted significantly, with Spain, Mexico,Argentina, and
Singapore making new appearances.
Positive Customer
Experience Levels Make
Gains
Positive CE by Country and Region:Countries
move up the CEI rankings when banks increase the
number of
customers with positive experiences. Banks in Central
and Western Europe were the most successful at
doing this, improving positive customer experience by
9.0 and 8.8 percentage points, respectively (see Figure
1.2).
Despite still-weak economic growth in the
Eurozone, demand for consumer credit increased
during 2015, especially for housing loans.3 Banks
inthe region capitalized on this demand, delivering
considerable customer experience improvement to
customers taking out loans (a 7.7-point increase in
Central Europe and
a 5.0-point increase in Western Europe).
Figure 1.2:Positive Customer Experience,by Region (%),2014-2016
... ..
...
North America
56.4%
55.6%61.3%
2015
2014
Western Europe
39.0%
2016
49.9% 58.7%
2015
2014
38.2%
2016
20142015
52.7%44.3%
2016
2015
2016
Asia-Pacific
36.4%39.6%46.6%
14
20
54.7%63.7%
2015
2014
Latin America
43.2%
..
..
Central Europe
2016
EDI
32.3%
37.5%43.5%
20142015
Note:
Country boundaries on diagram are approximate and representative only; Positive experience denotes an integer CB score of more
than 79 Source: Capgemini Financial Services Analysis,2016; 2016 RetailBankingvl'.>ice of the Customer Survey, CapgeminiGlobal
FinancialSe!vices
2016
"The euro area banklending survey, Fourth quarter of 2015", European Central Bank,January 2016, accessed March 2016 at
https://www.ecb.europa.eu/stats/pdf/blssurvey_ 201601.pdf?4bd32f9c94e348f242a3d86d5dbd029a
10
Netherlands (70.6%) and Czech Republic (67.0%)

recorded the highest overall levels of positive customer
experience. European countries as a whole had the
biggest gains in positive customer experience,led by
Sweden (an increase of 16.0 percentage
points),Netherlands, (14.3 percentage points), and
Germany (13.8 percentage points). Spain was the only
anomaly inthe region, recording a drop in positive
experience of 17.6 percentage points, bringing it to
35.7%, the second-lowest level after United Arab
Emirates (34.9%).
Increasing uncertainty in the emerging markets-related
to slowing growth in China, lower commodity prices,
and the expected specter of U.S. rate hikes-led to
much lower levels of positive customer experience
inthose regions.
Latin America experienced a decline in positive
experience (of 8.4 percentage points), putting it on par
with the low levels found in Middle East & Africa and
Asia-Pacific .
This declinein LatinAmerica was due to a
decrease in positive customer experience across
all products, channels, and lifecycle stages. North
America had
relatively modest growth in customer experience during
2016, but started from a strong base, giving it the
second highest level of positive experience overall.
Positive CE by Demographic: Underscoring the high

expectations they have for their service providers, Gen Y
customers4 registered lower levels of positive customer
experience, compared to Gen XS and other age group
customers6 (see Figure 1.3).
This difference was especially apparent in North
America, where only 47.7% of Gen Y customers
reported positive experiences, compared to 62.5% of
Gen X customers and 75.7% customers of other age
groups. These lower levels are cause for concern as
the younger generations become increasingly influential.
Gen Y customers are particularly important to banks,
given their large presence, expected longevity,and avid
use of technology.Yet having grown up on a steady
supply of advanced digital technology, Gen Y
customers are also more difficult to please.They also
have significantly less trust in their primary bank
compared to other age groups.To remain competitive
over time, banks must gear up to meet the more
exacting demands of this important segment.
Figure 1.3:Positive Customer Experience for Gen Y,Gen X,and Other Age Groups,by Region
(%),2016
Western Europe
North America
Central Europe
51.2% 58.5% 67.1%
47.7% 62.5% 75.7%
59.4% 63.7% 69.7%
IDB lll!DI
Asia-Pacific
Latin America
43.5% 44.6% 45.1%
40.8% 44.4% 54.6%
36.9% 45.7% 50.1%
IIIDIEI
{;:;;
GenY
{t
Gen X
OtherAge Groups
Gen Y less than Gen X -Gen X less than Other Age Groups
Gen Y more than Gen X -Gen X more than Other Age Groups
Note:
Country boundaries on ciagram are approximate and representative only
Source: CapgeminiF11ancialServices Analysis, 2016; 2016 RetailBanking Voiceof the Customer Survey, CapgeminiGlobal FinEllciaJ SeMCes
Gen Y refers to people born between 1981 and 2000
Gen X refers to people born between 1961and 1980
Other age groups refers to people aged 55 years and older
Positive CE by Channel:Customer experience levels

by channel illustrate the ongoing shift inhow
customers are choosing to interact with their banks.
Mobileis gaining ground, becoming the second-mostused channel after the Internet. One-third of
customers are using mobile at least weekly,up by 2.8
percentage points. Additionally, the level of positive
experience associated with mobile increased by 6.5
percentage points in 2016 to 55.6%
(see Figure 1.4). The Increasing tendency of banks to
adopt a mobile-first strategy is likely a catalyst of this
outcome.
Usage of branch and Internet channels declined as
customers began opting for the convenience of
banking via srnartphones.While the Internet
remains the most popular way to access the bank
by a large margin, usage
has decreased from 65.1% in 2015 to 59.4% in

2016. Branch usage is also down by 3.2 percentage
points,to 13.0%. Socialmedia usage,
meanwhile,ticked upward by
1.2 percentage points to 11.0%.
Though they are changing how they use channels,
customers still derive value from each one,and for
different reasons.Every channelexperienced a substantial
increase inpositive experience, withthe branch gaining
the most (7.2 percentage points), putting it at 60.7%,
just behind the Internet at 63.8%.These numbers
underscore the fundamental role the branch continues to
play in customer experience.It also points to the need
to develop a fully integrated set of channels to meet
customers' diverse needs.
Figure 1.4:Changes in ChannelExperience and Usage (%),2015-2016

Positive Experience with Channel
0\
2016
63.8%
Internet
58.1%
55.6%
t 0
, 49.1%
2015
60.7%44.7%
bile
t
Social Media
53.5% I 39.8%
Branch
2015
Customers Using Channels at Least Weekly
0l
2016
I
59.4%
65.1%
Internet
33.3%
30.5%
t 0
Mobile
2015
----------------- ' ------------------
2016
I
13.0%11.0%
16.2% I 9.8%
Social Media
2015
Increase in Customers Decrease in

Customers from 2015-2016
from 20152016
Note:
11
Country boundaries on diagram are approximate and representatiw only
Question:"How often do/willyou use the following channels for your banking needs? - Never,Couple of times a year, Monthly, Weekly,or
Daily" Source: CapgemiliFiner1cial SeMCes Analysis,2016;2016 RetailBanking Voice of the Customer
Survey,CapgemiliGlobalFinancialServices
12
Though social media progressed slowly inusage

over the last year,it is catching upto the other
channels in terms of providing positive experience
(44.7%). With customer receptivity to social media
running high,banks should continue to upgrade this
channel with additional functionalities that will
distinguish them from
the competition.
Positive CE by Trust Levels: Trust emerged as a
pressing issue on a globalscale,with only 54.5% of
customers around the world expressing trust and
confidence in their primary bank (see Figure 1.5).Trust
was highest in North America (67.4%) and lowest
inAsia-Pacific (47.6%),where every country recorded
low trust levels except India, which was an outlier
with the highest level of trust globally (75.9%).
Profitable Customer Behaviors Lag

Banks' ability to engage customers in positive behaviors,
such as staying withthe bank, referring it to others, and
purchasing additional products, is crucialto profitability.
Overall gains in these types of behaviors, however, have
not been commensurate withthe increase in positive
customer experience. On a global basis, only 55.1% of
customers said they are likely to stay with their bank for
the next six months, an increase of 1.4 percentage points
(see Figure 1.6). At a regional level,North America
retained its leading position interms of customer
likelihood to stay with their bank forthe next six months
(see Figure 1.7).
Loyalty was even less evident among Gen Y

customers, with only 45.8% saying they would stay
with their bank for six months, compared to 67.2% for
other age groups.
Customers with positive experiences were significantly
The difference in North America was especially stark,
more likely to have trust in their primary
with
bank.Globally, nearly three-quarters (71.0%) of
customers withpositive experiences had high levels of 45.7 of Gen Y customers sayingthey would stick with
trust in their primary bank, compared to only about
their bank, compared to 85.1% for other age
one-third (32.0%) of those with negative experiences.
groups. This indifference of Gen Y customers
toward their providers could well turn into a
customer-retention problem for banks, especially
inthe face of stiffer technology-based competitors.
Figre .5: Customers with Positive, Neutral,and Negative Experience having High Trust and Confidence
with their Primary Bank, by Region (%),2016
Western Europe
North America
Central Europe
66.8%
Asia-Pacific
Latin America
69.1%
28.3%
Positive Experience
Neutral Experience
Negative Experience
Note: Country boundaries on.ciagram are approximate and representative only;The number represents the p0(C01'1tage of customers who have
hightrust trust and confidence with thei' p,i:nary bank
Question: Please rate the following stat t (Please rate each criterion on a scale of 1-7, 7 being strongly agree and 1 being strongly
disagree) "- Ihave complete trust and confidence ,n ITT/ pnmary bank"
Source: CapgeminiFr1ancialServices Analysis, 2016; 2016 RetailBanking Voiceof the Customer Survey,CapgeminiGlobal FinErlcialSeMCes
13
a modest 2.2 percentage points, it remained the

worst performing regionwith only 31.9% of customers
likely to refer. Gen Y customers behaved more in line
with Gen X and other age groups in terms of
referrals; they were only somewhat less likely to refer
(36.7%), compared to Gen X (38.7%) and other age
groups (40.0%).
In terms of referrals, only 38.4% of respondents, up

by
1.0 percentage points in 2016, said they would refer
their primary bank to a friend. Efforts to boost
referrals by building a better brand presence
appeared to pay off in some markets, such as North
America and Middle East & Africa,which each saw an
increase In the likelihood of customers to refer by five
percentage points. Although Asia-Pacific pushed the
likelihood of referrals up by
Figure 1.6:Likelihood of Customers to Stay, Refer,and Buy from their Primary Bank
(%), 2015-2016
likely
Unlikely
2016
2015
9.5%
11.0%
l am
201655.1%
201553.7%
l am
Stay
2016
l am
9.1%
15.5%
2015
2016
2015
28.1%
28.7%
nm
2016
38.4%
2015
37.4%
l am
201615.9%
201515.3%
Buy
Percentage Point Decreasefrom 2015
Percentage Point Increase from 2015
Note:
Oount,y boundaries on diagram are approximate and representatille only
Question:"Howlikely are you to cher1ge your primary bankwithin the next six months"?(Please rateon a scale of 1-7, where 7 is higllylikely and
1is highly unlikely)
Question:"Howlikely are you to refer a friend to your current primary bank"? (Please rate on a scale of 1-7,where 7 is highly likely and 1 is highly
Lrllikely) Question:"Howlikely are you to purchase another product from your primary bank"? (Please rate on a scale of 1-7,where 7 is highly likely
and 1 is highly unlikely Source: CapgeminiFinancialServices Analysis, 2016; 2016 RetailBanking Voice of theCustomer Survey,CapgeminiGlobal
FinancialServices
When it comes to purchasing additional products,

only 15.9% of respondents, an increase of 0.6 points
in 2016, said they expected to buy an additional
product from their primary bank. The likelihood rose
the most in North America (by 2.7 percentage
points) and fell the furthest in Central Europe (by 3.1
percentage points).
While Gen Y customers did not distinguish themselves

from the pack in terms of product purchasing, the
overall low level of potential cross-selling is cause for
concern, pointing to the need for banks to aim high in
terms of innovative product development.
14
Figure 1.7:Customers' Likelihood to Stay withtheir Primary Bank in the Next Six Months,by Region
(%),
2015-2016
Customers Unlikely to Stay, 2015-2016
Customers Likelyto Stay,2015-2016
Percentage Point
Change from 2015
Percentage Point
Change from 2015
North America
(0.5%
)
Western
Europe
(1.1%)
62.2%
61.9%
60.9%
60.7%
0.3%
0.2%
Central Europe
5.2%
Asia-Pacific
5.4%
Middle
East &
Africa
0.6%
(2.9%
)
(4.9%
)
1.1%
2.6%
16.2%
15.1%
16.6%
14.0%
Latin America
(6.1%)
2016
2015
Note:
The number represents the peteentage of customers who are likely or unlikely to stay with their primary bank
Question: "How likely are you to change your primary bank withilthe next six months"? (Please rateona scale of 1-7, whera 7 is
highlylikely and 1 is highly unlkely)
Source: CapgemiliFiner1cial SeMCes Analysis, 2016;2016 RetailBanking Voice of theCustomer Survey,CapgemiliGlobalFinancialSelvioes
One way for banks to promote more profitable

behaviors is to deliver positive customer experiences.
While the industry has long purported that good
experiences make for more loyal customers, solid
evidence has been hard to come by. Our findings
confirm a strong correlation between positive
customer experience and loyalty, highlighting the need
for banks to devote additional resources to improving
all aspects of how customers interact with the bank.
Simply put, positive experiences pay off in the form of

retention and referrals. More than two-thirds of
customers with positive experiences {67.8%) are likely
to stay with their primary bank, compared to only
38.6% of those with negative ones. Further,customers
are more than twice as likely to refer if they have
positive rather than negative experiences {50.7% versus
22.4%). While the impact of
positive experience on cross-sales is more muted, it is
still tangible, especially in LatinAmerica, Middle East &
Africa, and Asia-Pacific.
The overall movement up the CEIscale, however,is

not paying off as much as banks would like in
Summary
terms of fostering profitable customer behaviors like
The 2.9-point increase in CEI is solid evidence that
retention and referrals. Perhaps most frustrating is
banks In most countries are delivering better
the level of cross-sale potential, whichremains
experiences to their customers. Positive experience
particularly low, at
improved in unlikely places,such as Japan, which
15.9 %. Inaddition to continuing to improve the
historically had low levels of customer experience.
customer experience, banks also need to uptheir
Europe, where countries are still trying to shrug off the
game in digital innovation. Improving the customer
effects of the financial crisis; and throughfJVery
experience will
channel, including newer ones, like mobile and social
wind up meaning very little without ongoing interest
media. Gen Y customers continue to have the most
and enthusiasm from customers.
resistance to bank efforts to improve experience.
15
Appeal of Fintech
Continues to Expand
18
Fintech Firms Make Gains

across Regions
Fintech firms are playing an increasingly larger role in
bringing financialservices to customers. Backed by
rising levels of venture capital and freed from the
constraints of legacy technology,fintech firms are
redefining banking and raising customer expectations
fortraditional banks in the process. Globally, nearly
two-thirds of customers (63.1%) said they use products
or services offered by fintech firms.
Penetration is highest inthe emerging markets. In Latin

America, nearly three-quarters of banking customers
(77.4%) use fintech products or services, followed by
Central Europe at 68.9% and Middle East & Africa at
63.6% (see Figure 2.1).The relative lack of banking
infrastructure inemerging markets appears to be
creating a hospitable environment for fintech firms to
not only provide basic services, but also leapfrog
beyond the standard levels of service found indeveloped
markets.
Customers in emerging markets also tend to have
more relationships with fintech firms, likely reflecting
gaps in services provided bytraditional banks in
those regions.
Figure 2.1:Banking Customers' Usage of Fintech Firms, by Region (%), 2016
Western Europe60.8fo
North America
Central Europe
59.1%
20.6%
68.9%
20.6%
Latin America
27.5%
66.4%
64.7%
n.4%
56.2%
Asia-Pacific
58.9%
46.1%
51.4%
30.4%
Adoption
Number of Relationships
e1
26.0%
55.2%
3+
Country boundaries on diagram areapproximate and representative only; The percentage represents the customers who are usi:lgfinancial
products orservices fromfintech firms
Question: 'Are you currently using arr-{ financialproducts or ssvices from fintech firms (such as Alibaba, Apple, Google, lending Club,PayPal, Paytm,
Prosper,
Stripe,Square, Zopa, etc.)"?
Question: "With how many fintech firms do you currently have a relationshp"?(Pleaseenter thenumber of fintech firms)
Source: CapgeminiFinancialServices Analysis, 2016;2016 RetIBanllg Voice of the Customer Survey,CapgeminiGlobalFll8llCial Services
Note:
While younger customers are more likely to turn to

fintech firms, the appeal of fintech is expected to
intensify among customers of all ages. Globally,the
demand for fintech is being driven more by Gen Y
customers (67.4%),compared to customers in other
age groups (55.9%). The biggest gap between Gen
Y and other age groups in terms of fintech adoption
is in North America (15.0%)
(see Figure 2.2).
Despite some pockets of resistance, fintech

adoption is expected to broaden across the board.
Most individual fintech firms have the advantage of
being highly specialized, providing attractive
alternatives to mostly commoditized banking
products and services.
Collectively,fintech firms cater to a wide range of
financial needs, providing customers withmany
avenues for initiating relationships.
19
Figure 2.2: Gen Y and Other Age Groups Using FinancialProducts/Services from
Fintech Firms, by Region (%),2016
Central Europe
Western Europe
North America
{:;:
72.6%63.1%
65.6%53.2%
62.0%47.0%
Latin America
MIW!#it+W@,
83.2%72.9%
{:;:
GenY
Other Age Groups
71.2%
57.4%
Asia-Pacific
60.9%53.0%
Gen Y morethan Other Age Groups
Country boundaries on diagram are approxi:nate and representativeonly;The percentage represents the customers who are using
financial products or se,vices from fintech fimis
.
Question: Are you currently using any financialproducts or services from fintech fi:Tns (such as Alhaba,Apple, Google, Lending CILO,PayPal, Paytm,
Prosper, Stripe,Square, Zopa,etc.)"?
Note:
Source: CapgemiliFinancial Services Analysis, 2016;2016 RetailBanking Voice of the Customer Survey,
CapgemiliGlobalFinancialServices
Fintech Firms Gain Customer Trust

For now, banks have the advantage of trust. In all regions
of the globe, customer levels of complete trust are
higher for primary banks. In some places, however,
fintech firms are catching up. In LatinAmerica, for
example, nearly half of customers (48.2%) say they
completely trust fintech firms, only 11.8 percentage
points behind the 60.0% who say they completely trust
banks. Across all regions,the percentage of customers
who completely or somewhat trust fintech firms is very
high (87.9% or more) (see Figure 2.3). As regulators
Increasingly turn their attention to fintech, driving
broader customer protections and addressing security
and privacy concerns, trust levels with fintech firms
are expected to rise even higher.
Rising levels of trust in fintech firms may threaten

what bank executives see as their greatest
strength.Nearly three-quarters (70.3%) view
customer trust as the most
potent advantage banks have over fintech firms,
followed by established customer relationships (65.3%)
and robust risk management (65.3%). Banks also have
advantage of their broad product portfolio over monoline and niche portfolios of fintech firms. Some of the
strengths perceived by bank executives may suggest an
underlying weakness. For example, though banks have a
wealthof customer data, they have not optimally
leveraged it, resulting in only 56.4% of executives
counting it as a strong point (see Figure 2.4).
20
Figure 2.3:Customers' Trust and Confidence in their Primary Bank vs.Fintech Firms, by Region
(%),2016
North America
Western Europe
3.6%
10.0%
Bank
Fintech
Note:
80.0%
48.2%
33.0%
44.1%
7.3%
Bank
12.1%
Fintech
Latin America
'
Central Europe
81A%
Bank
Fintech
11 31.9%J 6.6
33.1%11
57.0%
II
9.9
%
Asia-Pacific
Middle East & Africa
7.0%
Bank
7.4%
Bank
4.2%
7.6%
Fintech
7.8%
Fintech
6.6%
Complete Trust and Confidence
Somewhat Trust and Confidence
No Trust and Confidence
Country boundaries on diagram are approximateand representative only; The percentages refer to customers wtlo haw given arating of
1, 2 for No Trust and Confidence,3,4,or 5 for Sornewtlat Trust and Confidence,and 6 or 7 for Complete Trust and Confidence on a scale of
1-7
Question:Please rate the following statements. (Please rate each criterion on ascale of 1-7, 7 being strongly agree and 1being strongly
disagree): O 1have complete trust and confidence in my p,i'nary bank";i'Ihaw complete trust and confidence inInternet/technology
firms,such as Google,Apple, Amazon, Facebook,Alibaba, Lending Cub, PayPal, Paytm, Prosper,Stripe,Square,Zopa etc. when using
banking proci.Jcts/servioes offered by them
Source: CapgeminiFllanCial Services Analysis, 2016; 2016RetailBanking vl'.lice of the Customer Survey, CapgeminiGlobalFinancial Se!vioes
Over the long term, current bank strengths may not

hold up against the appeal of the growing numbers
of tech savvy fintech firms. The new firms leverage
advanced analytics to analyze customer behavior in
support of targeted marketing, and use cutting-edge
technology
to develop innovative products, while delivering superior
customer experience and passing along savings to

end users. Traditional banks must recognize their
vulnerabilities with respect to fintech firms,and begin
allocating resources toward addressing them.
Figure 2.4:Banking Executives' Perception of Banks' Strengths vis-a-vis Fintech Firms (%), 2016
Customers' Trust
Established Customer Relationships
Robust Risk Management

Availability of Customer Data
Spread of Products and Services
Scale of Operat ions
Note:
The percentage represents the percentage of bankingexecutives wtlo haw given a rating of more than 5 on a scale of 1-7 for each
of the strategies Question:"There is a lot of talkabout innovation inthe banking industry driven by both banks and new entrants.What do you
think are your bank's strengths
vis-a-vis fintech firms"?
Source: CapgeminiFinancial Se!vioes Analysis, 2016;2016 RetailBanking Executive Interview Survey, CapgeminiGlobal FinancialSe!vioes
Most banks, however,are bogged down by aging

technology and slloed businesses, making it difficult
for them to move with speed and agility.Less than
one quarter of bank executives surveyed said their
institutions had an advantage over fintech firms in
their ability to innovate or move nimbly (see Figure
2.5).
21
This slowness is a liability. Banks need to begin cutting

through organizational barriers and transforming their
systems to be able to compete against fintech firms.
Figure 2.5: Banks' Self-Assessment of their Agility and Ability to Innovate vis-a-vis Fintech Firms,2016
Low
-Organizational Agility -High
Note:
The percentages refer to banking executilles who have given a ratingof 1, 2 for Low, 3, 4,or 5 for Medium,and 6 or 7 for H-.gh on ascale of 1-7
Question: 'How would you compare yo,:s bank's abliity to innovateand agilityvis-a-vis flntech firms"? Please explain.(Please rate on ascale of 17, with 7 being the higlest rating and 1 being the lowest rating)
Source: CapgeminiFinancialServices Analysis, 2016;2016 RetIBanllg Executille Interview Survey, CapgeminiGlobal Financial Services
Fintech Firms Get More

Referrals than Banks
The perceived advantages of fintech firms extend far
beyond their ability to Innovate and move quickly. From
the customers' perspective, flntech firms have value In
being easy to use (81.9%), offering faster service
(81.4%), and providing a good experience (79.6%).
Banks, however,
have mostly underestimated these value propositions.

While they agree that fintech firms offer ease of use
(89.1%), they do not perceive them as providing a good
experience (only 39.6%) or fast turnaround (35.6%) (see
Figure 2.6).
Rather than discount fintech offerings, banks should
take cues from them on how to provide an experience
and servicelevel that resonates with customers.
Figure 2.6: Value Proposition of Fintech Firms (%),

2016
Customp. ' Perspec11ve
Banks' Perspective
Ease of Use
Faster Service
ood Experience
fl+
Lower Fees
G9
ore Features
Lack of Service by Primary Bank
+
if@
Gyitegration
with
Social
Easeof Use
Speed to Marl<et
Q_Lower Fees
SociallyIntegrated Services
a::Y,ood
Service/Experience
fjf:
Media
Fersonalized
Service
Quick Turnaround
Note:
The percentage represents the customers who have givena rating of more than 4 on a scale of 1-7
Question:"What are the primary reasons for using products/services fromfintech firms? (Please rate each factor on a scale of 1-7, 7 being very important
and 1
being not important at aiO
Question: Someof the fintech firms (such as Moven,Lending Club,Zopa,etc.) have been gaining significant traction in the marl<et. What do you think
is the
value proposition of thesefirms? What are the strengths of fintech firms vis-a-vis banks"?
Source: CapgeminiFinancial Services Analys'is, 2016; 2016Reta-.1 Banking Voice of the Customer Survey, 2016Reta-.1 Banking Executive Interview
Survey,
Capgemini GlobalFinancialServices
22
Bank executives acknowledge that fintech firms

are well equipped to make significant inroads in
specific
banking businesses. One area of vulnerability is cards
and payments, which 84.2% of bank executives
perceive as an opportunity for fintechs, driven by rapid
growth in mobile wallets, mobile payments, and greater
demand for real time payments.
(see Figure 2.7). Yet they may be underestimating the

threat. Global investment in fintech was expected to
nearly double from $10 billion in 2014 to $19.7 billion in
2015, with about 60% of that investment coming from
outside the banking and financial community.7 The
dramatic risein investment indicates that fintech's
influence is seeping into all aspects of traditional
banking.
Banks are less concerned about encroaching

competition in the areas of loans (55.4%),accounts and
investments (45.5%), financial advice (42.6%), and
mortgages (20.8%)
Figure 2.7:Banking Executives' Assessment of Opportunity Areas for Fintech Firms (%), 2016
84.2%
Loans
Raising FinancialAwareness
55.4%
51.5%
.Accounts and Investments

FinancialAdvice
Mortgages
Note:
The percentage represents the percentage of banking executives who haw given arating of mOf'e than or equalto 5 for each of the
strategies Question:"Inyour opi,ion,which of thefollowing balking areas provide the biggest opportunity forfintech firms?
Source: CapgeminiFinancialServices Analysis, 2016;2016 RetailBanking Executive Interview Survey,CapgeminiGlobal Financial Services
The efforts of fintech firms appear to be already paying

off. In every region of the globe, customers are more
likely to refer their fintech service provider to a friend
(54.9%), rather than their bank (38.4%).The tendency is
highest in Latin America where 67.2% of customers
say they would likely refer their fintech provider,followed
by North America where 63.7% of customers would.
Inthose regions, only 47.2% and 50.5%,
respectively,say they would refer their bank (see
Figure 2.8).The ability of fintech firms to provide
efficient and rewarding experiences, combined

withthe novelty of their offerings, is no doubt driving
customers to make the referrals. As the volume of
referrals expands, fintech firms will reap additional
benefits in the form of higher adoption rates and
lower acquisition costs.
"FinTech lnwstment Expected To DoubleIn 2015',Ryan W. Neal,Intelligent AdvisorWealthMangement.com, Feb

19,2015, accessed March 2016 at http://wealt hmanagement.com/b log/fintech-investment-expected-double-2015
23
Figure 2.8: Likelihood to Refer a Friend to Primary Bank vis-a-vis Fintech Firms, by Region (%),2016
North America
Central Europe
Western Europe
50.5% -35.4% -40.4%

63.7%
51.8%
57.1%
Latin America
Asia-Pacific
Middle East & Africa

47.2%
67.2%
Likelihood to Refer Primary Bank
41.3%
-31.9%
51.3%
50.1%
Likelihood to Refer Fintech Firms
Note:
Countiy boundaries on diagram are approximate and representative only;The percentage represents the customers who havegiven a
raoog of 6 or 7 on a scale of 1-7
Question:"How likely are you to refer a friend toyourctnent primary bank ? (Please rateon a scale of 1-7, where 7 is highly likely and 1 is highly
unli<ely)
Question:'Howlikely are you torefer afriend tothe fintech firms with whomyou currently have a relationshi>"? (Please rate on ascale of 1-7,where
7 is highly likely and 1is highly unlikely)
Source: CapgeminiFinancialServices Analysis, 2016;2016 RetailBanking Voice of theCustomer Survey,CapgeminiGlobal FinancialServices
Summary
Fintech firms have emerged as a potent force in
financial services. Customers are drawn to them
forthe fresh perspective they bring to services that
have been highly commoditized bythe banking
industry.Not only do a majority of customers use
fintech services, they also place a high amount of trust
In them, threatening to undermine
one of banks' long-standing advantages. Perhaps the

most disturbing threat forthe banks is that fintech
products are top-of-mind, with customers being much
more likely to refer them to friends than bank products.
Banks need to become more proactive in dismantling
the organizational and technological barriers that are
preventing them from competing more effectively
against fintechs.
World Retail Banking Report 20 16
25
Key Findings
Banks are struggling to respond to increasingly aggressive fintech competitors.
Ninety percent of banking executives believe that the pace of change in
banking is accelerating, driven by the need to innovate and rising competition
from fintech firms.
Competition is evolving into acceptance, with nearly two-thirds of bank
executives (65.3%) saying they view fintech firms as partners. The most
popular ways of partnering with fintechs are through collaboration (45.5%)
and investment (43.6%).
While 96.0% of bank executives agree that the industry is evolving toward a
digital banking ecosystem, only 12.9% say their core systems can support
such an ecosystem.
Fintech partnerships are expected to propel banks toward a much bigger
role in defining the future of digital banking.
Banks and fintech firms will need to work together and leverage each
other's strengths to create the best possible future ecosystem.
By being proactive, banks can reduce the risk of being marginalized
as the ecosystem evolves.
APls are essential to the future of banking, offering the ability to
take advantage of fintech assets such as speed and creativity.
While some banks have embraced the open architecture of APls, the industry
as a whole still has a long way to go, mostly because of limits imposed by
aging technology systems.
Banks will need to navigate the transition into APl-based software
development carefully, to ensure they remain integral to customer relationships.
Regulation such as Payment Services Directive 2 (PS02) will exert ongoing
pressure to expose banking core ledgers openly and transparently to thirdparty solution providers.
While banks will face challenges in evolving a digital banking
ecosystem, a well-structured roadmap can help them overcome these
challenges.
Transforming legacy systems with more agile and scalable systems are
essential for banks to fully leverage the potential of a digital banking ecosystem.
As banks put agile systems in place and maintain a 360-degree view of their
customers, they take on the facilitator's role for both financial and nonfinancial transactions in the digital banking ecosystem and still retain their
critical role in customer relationships.
26
Fintech Competition Takes on

More Aggressive Edge
Disruptive technology has already transformed
industries like music, publishing and retailing, and now
it is starting to upend banking. For years, retail
banks remained somewhat protected by barriers that
helped keep competitors at bay,such as heavy
regulation and long standing customer relationships.
While regulations have been burdensome to banks,
they have also made it more difficult for non-banks to
establish competitive offerings. In addition, non-banks
have struggled to detach customers from sticky banking
relationships.
Increasingly,however, these obstacles are starting to
crumble,as fintech solutions become more and more
compelling, and interest and investment in them soars.
The growing clarity over the rules and regulations
that govern fintech firms will only help the progress
of non banks. In addition, fintech firms are ina better
position than ever to take customers from banks
because of the clear articulation of their value
proposition and superior customer experience.
The threat of competition has ratcheted up
appreciably, with 90.1% of banking executives saying
the pace of changeis accelerating in the industry. The
nature of the competition is also different. Though
early competitors introduced new channels, they are
still focused on
delivering traditional financial products and

services. Banks were easily able to catch up to
these Internet only interlopers, and In fact could
surpass them by emphasizing their full range of
integrated channels.
Today's competitors are much more aggressive.They
are focused on peeling off specific pieces of the
banking business, such as payments,loans or
deposits, and developing niche offerings that are
highly attuned to customer preferences. Drawing
upon their expertise in digital, mobile and cloud
technology,fintech firms are bringing to market highly
creative products that hold special appeal for
growing numbers of customers, especially ones who
are younger and tech-savvy.
Partnerships Gain Greater Appeal

Banks are not well prepared to respond to this
growing fintech threat. The vast majority of bankers
surveyed (96.0%) said they agree banking is
evolvingto become a series of inter-connected digital
financial services within a secure and regulated
ecosystem. But they do not view themselves as
prepared to support such an ecosystem. Only 12.9%
say their core systems are upto the task (see Figure
3.1). However, banks globally are continuing to invest
in core system renewal initiatives to support
increasing participation in digitally connected
ecosystems of trusted providers.
Figure 3.1:Banks' View of DigitalEcosystem and their Core Systems' Capability (%),2016
'
Agreement with
Digital Banking
sustaining
Evolution of
Ecosystem
Banks' View of their Core Systems
Banks' View of Digital Ecosystem,2016
to Sustain the Ecosystem, 2016
Are your core systems

capable of
and other
such an ecosystem?
Yes
Note:
The percentage represents the percentage of banking executives who have respondedwith a Yes
Question:"There isa not on that the banking industry is evolving toward adigitalecosystem (leveraging digitalcapabilities and technologicalexpertise
of different players to sustainand thrive ina rapidly changing business environment). Do you agree?If yes, are your core
systemsandothertechnology
capableof sustaining such an ecosystem?
Source: Capgemini FinancialServices Analysis,2016;2016 RetailBanking ExecutiveInterview Survey,CapgeminiGlobalFinancialServices
To keep upwith the rapid changes caused by fintech

firms, banks are exploring new approaches to
innovation, Including collaboration, incubation and
acquisition.Nearly two-thirds of banks (65.3%) say they
view fintech firms as partners, a striking level of
acceptance,given the historical perception of fintech
as a destructive element. The shift reflects the reality
that each side offers something to
27
the other. Fintech firms excelintheir ability to move

quickly,innovate,and exploit new technology, while the
banks have capital,deep customer bases, and
expertise in dealing with regulators. While 27.7% of
banks continue to view fintech firms as competitors,
only 6.9% view them as irrelevant (see Figure 3.2).
Figure 3.2: Banks' Perception of Fintechs and Strategies of Banks to Compete with Fintechs (%),2016
Strategies of Banks to Compete
with Fintechs (%), 2016
Banks' Perceptionof Fintechs (%), 2016
C
Q_
Collaborat
e Invest
Compete by Building Capabilities__,___.
Acquire Fintech and Tech
Do Nothing
Note:
The percentage represents thepercentage of banking exea.,tives who havegiven a rati'lgof more than 5 on a scale of 1-7 for each of
the strategies Question:"How do you view fintech firms - as a competitor,a partner,or irrelevant"? (Please choose theapplicable option)
Question:"What is yo..,: strategy to competeinthe evolving banki'lg enlli'ament from the perspective of competition from fintech
firms"? Source: CapgeminiFinancialServices Analysis, 2016;2016 RetailBanking Executivelnte,view
SUMl'f,CapgeminiGlobalF11ancial Services
The growing level of partnership between banks and

fintech firms is expected to take many forms.
Collaboration and investment are high on the list of bank
strategies, with 45.5% citing collaboration and 43.6%
lookingto invest in fintech firms. Bytaking advantage of
fintech capabilities. banks can grow existing businesses
or enter into new ones, such as low-value payments
and loans. Acquisition holds less appeal, with less
than one-fifth (17.8%) saying they plan to acquire
fintech firms or their technology.
Virtually all the bankers surveyed agreed that the
advance of fintech requires action.Only 4.0% cited
doing nothing as a valid option (see Figure 3.2).
Already, banks have taken big steps toward partnering/
investing/acquiring fintech firms. One prominent
example is the acquisition of the U.S. mobile banking
firm, Simple, bythe U.S. unit of Spain's BBVA. Nearly
two years into the acquisition. Simple had doubled its
number of customer
accounts and was growing users by 10% a month.8

Other banks are spreadingtheir investments around.
The U.K. arm of Spain's Santander, for
example,launched a $100 million venture-cap ital
fundto invest intechnologies it thinks will be critical to
its future.9
Incubation is also a big theme in fintech partnerships.
Barclays inthe U.K. is keeping its financial outlay to a
minimum by instead providing office space,equipment
and mentorship to selected start-ups in the hope of
soaking up some entrepreneurial know-how and
perhaps gaining access to valuable applications for
the bank.10 Singapore-based DBS has launched a similar
type of fintech accelerator program in Hong Kong.11 In
addition to a start-up accelerator, Wells Fargo in the
U.S.,like a growing number of banks around the
globe, operates a
series of innovation labs to test new ideas and
applications with the aim of revamping the customer
experience.12
"Banks and Fintech Firms' Relationship Status: It's Complicated',Daniel Huang,The Wall Street Journal, Nov. 18,
2015,accessed March 2016 at http://www.wsj.com/articles/banks-and-fintech-firms-relationship-status-its-complicated-1447842603
"Santander tolaunch a $100M fund for Fintech companies out of London',Santander, July 2,2014,accessed March
2016 at http:// santanderinnoventures.com/santander-to-launch-a-100m-fund-for-fintech-companiesout-of-london/
10
http://www.barclaysaccelerator.co
m/ 11 https://www.dbsacceleratorcom/ 12
https://labs.wellsfargo.com/
28
Evolving a Digital
Banking Ecosystem
Today's partnerships are a stepping-stone toward a
much bigger role banks are expected to play in
creating a digital banking ecosystem . In the emerging
ecosystem, existing bank infrastructures and new fintech
technologies will both play strong parts. Banks and
fintech firms will need to work together to leverage
each other's strengths as they seek to create entirely
new ways of interacting
with customers.
Banks have much to gain by participating fully in the

effort to forge a new digital banking ecosystem (see
Figure 3.3). Being proactive will helpthem reduce the
risk of being marginalized as the ecosystem evolves.
They will also be better equipped to meet rising
customer expectations for enhanced experiences and
innovative services. Finally, they can explore ways of
generating revenue from fintechs that want to tap their
expertise in traditional banking areas like risk
management and payments. Putting a price on assets
like geo-enhanced data, customer authentications and
money transfers could help banks generate new
revenue streams.
Figure 3.3:Creating a Digital Ecosystem
Source:
CapgeminiFinancial Ser\Aces Analysis,2016
To date, many of the emerging fintech providers are

so called modular producers,13 offering narrow, niche
services that present less of an overall threat to
traditional banks. More alarming is the idea of a
technology heavyweight, such as Google,Apple,
Facebook, or Alibaba,moving
into financial services and leveraging Its global
brand to build a competing digital financial
ecosystem. In that
scenario, banks risk becoming mere suppliers in
networks controlled and operated by non-bank
powerhouses.
APls Hold Promise

Banks can retaina lasting and important role inthe
evolving digital landscape by building bridges to third
parties through open APls. AP! software tools let data
that is owned by the bank be securely accessed by
mobile or Web application providers and then put to
use incompelling ways. Essentially, by providing
access to proprietary information with due consent from
customers, banks create an inside track for innovative
ideas and customer-focused apps to flow into the
organization
(see Figure 3.4).
15
Some banks around the world have already begunto

embrace the open architecture of APls. PrivatBank
of Ukraine,one of the first to do so,today offers
hundreds of APl-based services, including one that
lets customers tap their smartphones to the ATM to
get cash.14 Fidor
Bank, based in Germany, bills itself as an appstore
with a banking license, offering core banking services
alongside a wealth of more advanced, APl-developed
capabilities, like peer-to-peer lending and foreign
exchange transfers.15 YES BANK of India actively
promotes its API Banking Services, which are
leveraged by eCommerce firms to deliver services like
instant refunds.16
The industry as awhole, however, is still far from
having a core competency in APl-based development,
mostly
because of the limits Imposed by banks' aging
technology systems. Even with temporary fixes like
screen scraping and wrapping, legacy systems still
have limited scalability, restricted functionality,higher
maintenance costs, increased complexity, and slower
time to market.
13
"Thrivingin an Increasingly Digital Ecosystem, Peter Weill and Stephanie L Woerner, MIT Sloan Management Review,June 16
2015, accessed March 2016 at http://sloanreview.mit.edu/article/thriving-in-an-increasingly-digital-ecosystem/
14
"PrivatBank Brings Smartphone-Controlled ATM Technology to Western Market,David Penn, Finovate.com, April 30,2014, accessed
March 2016 at http://finovate.com/privatbank-brings-smartphone-controlled-atm-technology-to-western-market/
www.f idortecs.com
16
"YES BANK Partners with Snapdeal and FreeCharge for MultipleInnovations, September 15, 2015.,accessed March 2016 at
https://www.yesbank.in/media-centre/press-releases/fy-20 15-16/yes-bank-partners-with-snapdeal-and-f reecharge-for-multipleinnovations.html
29
Figure 3.4:Open API Banking Landscape
Threats
Innovation
Opportun1t1es
Commoditization of Banking Processes
New Products and Services

Better Customer Experience
Customer
mand
Effective Regulatory Compliance
Disintermediation
Better Customer Insights
Losing Business
Regulations
Source: Capgemini FinancialServices Analysis, 2016
Getting maximum value from APIdevelopment will

require banks to analyze their IT architectures withthe
aim of transforming their core systems. Though high-risk
and high-cost, core transformation offers a pathway
toward
a fully flexible,low-cost, reliable platform suitable for
APIdevelopment.
The pressure to move toward a more APl-friendly
environment is expected to increase as regulators
take a more proactive approach to facilitating account
access by trusted third parties. Various European
Union directives and regulations, including the PS02
and the Access
to Accounts (XS2A) article,will define the technical
requirements for secure account access, making it
even more attractive and feasible forthird parties to
develop applications for alltypes of banking
functions.
As banking becomes more open, fintech firms will

have greater access to customer data. Customers
themselves will own their data, and will grant
permission to third parties wantingto access it. This
openness will help spur an unprecedented level of
creativity in product development and cause new
services to be brought to market more quickly than
ever before.The risk, however, is that bank-customer
relationships may become increasingly splintered.
Banks will have to work even harder to make a
positive impression on customers and
remain an integral part of the overall customer
relationship.
Roadmap to Create a
Digital Banking Ecosystem
Banks have different options to prepare themselves
for the forthcoming challenges. Some banks,
unaware of the coming shift or unable to decide
what to do about it, are maintaining the status
quo, though their inaction may prove fatal in the
medium to long run.A temporary approach
involves making incremental investments as and
when required,while still operating in silos. A
more collaborative approach would incorporate a
wide range
of partnering strategies, ranging from joint ventures and

venture capitalfunds, to innovation labs, accelerator
programs, and acquisitions. Banks may leverage their
collaboration with fintech firms to accelerate speed to
offer new products and/or services. Though these
approaches can helpbanks to an extent, full growth
potential can be realized only if banks make
themselves free of legacy systems and replace them
with more agile and scalable systems.
Inthe absence of a defined approach to carrying out
the transformation toward a digital banking
ecosystem, banks may consider a step-wise
approach (see Figure
3.5).They will first have to identify their focus areas.
The next step would involve making strategic
decisions around planning and execution. Banks then
need to collaborate withfintech firms by creating an
open APIsystem, which will help banks leverage new
technologies for superior product and services
development. The most important step will be to
transform legacy systems to a more agile
infrastructure able to support the bank's central role in
the changing ecosystem. Banks would evolve from
being the sole providers of financial services to being
facilitators providing bothfinancial and non-financial
services.
Ensuringthemselves a leadership role inthe coming
digital ecosystem will require banks to adopt a
comprehensive strategy. As a first step, banks need to
accept fintech firms as major players in the new
ecosystem. In partnering withthem, banks should strive
to create an atmosphere where valued fintech
characteristics, such as flexibility
and speed, can thrive.That may mean ring-fencing
fintech partners from the rest of the organization,
especially legacy systems. At the same time,banks
must ensure that their vast knowledge about
compliance and security reaches their fintech partners
throughadequate training
and guidance. Perhaps most important, banks must
make sure they maintaina 360-degree view of all
customer data, which will be crucial to preserving a
strong role in customer relationships.
30
Figure 3.5:Building a DigitalBanking Ecosystem

Transform
Transforming legacy systems
is imperat ve for banks to sustain in thelong run:
Be more agile (shorten development
time) by movingto anew technology base
Adopt Service-Oriented
Architecture (SOA) to open their systems through APls
Banks shouldlook to collaborate
with flntech firms:
Strategize
Removeon
data
duplicat onand
to enable
real-time analytics
Build APls to enable applicat
development
innovation
Banksnew
should
devise
Build services using
technologies
a plan to develop capabillties in the Identified areas:
Identify
Build
Buy
Collaborate
Banks should identify the areas to focus and develop capabilities
to attainlong-term competit iveness and sustainability
Invest strategically
Col aborate
Source: CapgeminiFinancial Selvioes Analysis, 2016
Summary
As fintech firms proliferate and raise customer
expectations, banks are starting to view them as
partners with expertise in developing digital services
that match heightened customer expectations. A
steadily increasing number of fintech acquisitions,
innovation labs, and accelerator programs illustrates
that banks are
increasingly seeking ways to collaborate with fintech
firms rather than fight them. The most important
elements of successfulcollaboration with fintechs will be
liberal use
of APls, backed by modern technology freed from
legacy constraints. Smartly embracing open
architecture will help banks achieve the criticalgoal of
bringing more compelling products to market, while still
remaining central to the overall customer relationship.
Changing attitudes toward fintech providers foretell

the coming of a new normal. With fintech
continuing to gain momentum, it will not be long
before they become fully integrated into business-asusual banking.
32
Australia
CEIRank
CEI Index
Positive Experience
Customer Channel Usage at Least Weekly
I nternet
Trust with Primary Bank
*=20%
Likelihood to Stay
66.2%
67.2%
Mobile
32.0%
Branch
11.4%
SocialMedi
a
Likelihood to Refer
30.8%
Likel hoodto Purchase
6.8%
Customers' Perspective of Fintech Firms
Source: 2016 Retail Banking Voice of the Customer

Survey,Capgemini
7.8%
Fintech
Adoption Rank
Split of Fintech Customers by Number of

Relationships
Fintech Adoption
9.5%
12.1%
e1
2
3+
Top 3 Customers' Perceived Benefits

with Fintech Firms
Trust with Fintech Firms
86.6%
**
Likelihood to Refer
Source:2016 Retail Banking Voice of the Customer

Survey,Capgemini
*= 20%
50.3%
0
0
Good Service/Experience
82.4%
Faster Services
80.4%
Belgium
CEIRank
CEIIndex
Positive Experience
Customer ChannelUsage at Least Weekly
I nternet
= 20%
Likelihoodto Stay
59.3%
57.9%
D
Soci
Mobile
23.0%
Branch
11.4%
alMedia
6.6%
*
,
Likelihood to Refer
30.5%
Likelihood to Purchase
6.2%
33
Fintech
Adoption Rank

Relationships
Fintech Adoption
13.3%
16.1%
e1
2
3+

with Fintech Firms
--
12.2\\
**
Likelihood to Refer
*=
20%
39.9%
CJ
0
Ease of Use
Faster Services
69.0%
69.0%
68.5%
34
Brazil
CEIRank
CEI Index
Positive Experience
D
0
Internet
Mobile
Branch
59.4%
49.4%
23.5%
*= 20%
Likelihood to Stay
45.6%
Likelihood to Refer
**1
47.8%
Social Media
13.1%
26.3%
Fintech
Adoption Rank

Relationships
Fintech Adoption
e1
25.9%
3+
30.5%
with Fintech Firms
Ease of Use
Faster Services
Likelihood to Refer
***1
89.5%
88.1%
*=20%
68.7%
87.1%
France
CEIRank
CEIIndex
Positive Experience
I nternet
Mobile
19.6%
Ot
Branch
7.9%
alMedia
6.3%
= 20%
Likelihoodto Stay
67.7%
D
Soci
53.4%
Likelihood to Refer
29.6%
6.9%
35
Fintech
Adoption Rank
Fintech Adoption
e1
2
3+

with Fintech Firms
**,
Likelihood to Refer
*=
20%
46.9%
CJ
#1
Faster Services
82.7%
Ease of Use
82.3%
76.2%
36
Germany
CEIRank
CEI Index
Positive Experience
D
0
I nternet
57.9%
Likelihood to Stay
***'
**
Mobile
26.5%
Branch
23.0%
*= 20%
61.3%
Likelihood to Refer
43.1%
Social
Media
5.2%
15.2%
Fintech
Adoption Rank

Relationships
Fintech Adoption
14.5% -
e1
2
3+
22.3%

with Fintech Firms
"tI/Lower
***,
Likelihood to Refer
63.3%
*=20%
66.3%
P
0
Fees
84.9%
Faster Services
84.3%
Ease of Use
83.7%
37
Hong Kong
CEIRank
CEIIndex
Positive Experience
Internet
= 20%
Likelihoodto Stay
50.2%
41.1%
Mobile
25.5%
Branch
14.4%
- Social Media
14.4%
Likelihood to Refer
18.2%
12.5%

Fintech
Adoption Rank
Split of Fintech Customers by Number

of Relationships
Fintech Adoption
e1
2
22.8%
3+
65.6%
with Fintech Firms
77.2%
Faster Services
Likelihood to Refer
,1
*= 20%
33.0%
CJ
73.1%
Ease of
Use
Lower Fees
69.4%
38
India
CEIRank
CEI Index
Positive Experience
o --
40.2%
45.6%
Likelihood to Refer
55.0%
21.5%
0-
*= 20%
Likelihood to Stay
59.8%
Internet
Branch
21.7%
-SocialMedia
**
37.5%

Fintech
Adoption Rank
Fintech Adoption

Relationships
35.2% :
29.8%
_A
3+
35.0%
with Fintech Finns
Trust with Fintech Finns
Faster Services
***
Likelihood to
Refer
*=20%
89.6%
89.4%
70.7%
Ease of Use
88.1%
39
Italy
CEIRank
CEIIndex
Positive Experience
Internet
= 20%
Likelihoodto Stay
59.2%
46.0%
Mobile
33.8%
Branch
12.2%
Likelihood to Refer
32.4%
Social Media
13.8%
10.0%
19.9%
69.6%
Fintech
Adoption Rank
Fintech Adoption
e1
2
3+
,-
23.
***
/o \
Likelihood to Refer

with Fintech Firms
0
\
*=
20%
59.6%
Faster Services
CJ
?
Ease of Use
Good
Service/Experience
86.5%
82.4%
79.8%
40
Japan
CEIRank
CEI Index
Positive Experience
26.9%
Internet
13.1%
Mobile
*= 20%
Likelihood to Stay
***
57.4%
Likelihood to Refer
16.9%
11.4%
Branch
4.2%
3.0%
Social Media

Fintech
Adoption Rank
Fintech Adoption

Relationships
18.0%
e1
2
24.6%
3+
57.4%
---- -

with Fintech
Firms
';7
\
*
..... _
Likelihood to Refer
3.8%
*=20%
2
Lower Fees
82.0%
Faster Service
73.8%
Ease of Use
72.1%
41
Netherlands
CEIRank
CEIIndex
Positive Experience
D
O t
I nternet
Mobile
69.5%
42.1%

Likelihood to Stay
***1
*, *
Likelihood to Refer
Branch
4.6%
= 20%
67.7%
37.9%
Social Media
6.6%
23.3%
5.6%
Fintech
Adoption Rank

Relationships
Fintech Adoption
e1
2
3+
65.6%

with Fintech Firms
21.
**
Likelihood to Refer
*=
20%
49.0%
0
P
Ease of Use
77.9%
Faster Service
72.3%
71.9%
42
Norway
CEIRank
CEI Index
Positive Experience
D -Ot
Internet
Branch
Social Media
5.2%
*= 20%
Likelihood to Stay
70.1%
36.5%
Mobile
66.5%
*._
Likelihood to Refer
30.5%
7.6%
9.4%
Fintech
Adoption Rank

Relationships
Fintech Adoption
14.6%-
e1
2
20.1%
3+
65.3%
with Fintech Firms
*1'
Likelihood to Refer
Faster Service
70.7%
Ease of Use
70.1%
*=20%
37.4%
Lower Fees
Singapore
CEIRank
CEIIndex
Positive Experience
D
0
Internet
42.8%
Mobile
28.2%
Branch
9.8%
**
= 20%
Likelihoodto Stay
55.8%
Likelihood to Refer
28.0%
SocialMedia
11.8%
11.4%
43
Fintech
Adoption Rank

Relationships
Fintech Adoption
13.8%--
e1
2
21.6%
3+
64.7%
Likelihood to Refer
1'

with Fintech Firms
*=
20%
36.9%
0
P
Ease of Use
81.3%
Faster Service
79.4%
78.8%
44
Spain
CEIRank
CEI Index
Positive Experience
Internet
54.0%
26.3%
Branch
Social Media
12.5%

Likelihood to Stay
**
*
37.8%
Likelihood to Refer
30.3%
13.1%
Source:2016 Retail Banking Voice of the Customer

Survey,Capgemini
*= 20%
11.0%
Fintech
Adoption Rank
Fintech Adoption

Relationships
15.8%-
e1
2
29.8%
3+
54.5%
with Fintech Firms
Faster Service
Likelihood to Refer
81.5%
80.7%
Lower Fees
79.8%
*=20%
50.9%
Source: 2016 Retail Banking Voice of the Customer

Survey,Capgemini
45
Sweden
CEIRank
CEIIndex
Positive Experience
D -O t
Internet
60.4%
35.8%
Mobile
Branch
3.6%
= 20%
Likelihood to Stay
***,
**
65.4%
Likelihood to Refer
37.8%
SocialMedia
7.8%
11.4%
Fintech
Adoption Rank

Relationships
Fintech Adoption
13.3%-
e1
2
16.6%
3+
70.1%

with Fintech Firms
Ease of Use
70.7%
63.9%
Lower Fees
62.1%
26.
Likelihood to Refer
**
*= 20%
52.4%
46
U.K.
CEIRank
CEI Index
Positive Experience
D ..
Internet
Mobile
Branch
Social Media
55.1%
30.8%
5.2%
*= 20%
Likelihood to Stay
65.0%
15.7%
Likelihood to Refer
**
37.8%
13.1%
Fintech
Adoption Rank

Relationships
Fintech Adoption
12.8%
14.6%
e1
2
3+

with Fintech Firms
C)
Likelihood to Refer
**
Ease of Use
85.7%
83.4%
*=20%
53.6%
Faster Services
81.0%
U.S.
CEIRank
CEIIndex
Positive Experience
Internet
65.4%
Mobile
43.4%
Branch
25.3%
= 20%
Likelihoodto Stay
***
58.9%
Likelihood to Refer
53.6%
SocialMedia
13.1%
22.8%
47
Fintech
Adoption Rank

Relationships
Fintech Adoption
e1
17.2%-
3+
23.2%
59.6%

with Fintech Firms
Ease of Use
Likelihood to Refer
**
91.6%
90.4%
*= 20%
69.6%
Faster Services
87,7%
49
Figure 81:Customer Experience Index,by Country,2015-2016

Global Average
72.7
75.6
(2016)
Point Change
80.9
78.9
80.4
73.4
2.0
80.4
77.5
80.2
' 73.9
' ''
80.0
2.9
(2015)
2015-2016
''
Canada
Netherlands
''
''
Czech Republic
U.K
Switzerland
U.S.
Russi
a
Austria
Portugal
Turkey
7.0
' '
''
6.3
6.3
'' 73.7
80.0
I 76.6
''
79.9
I 75.8
''
79.0
76.2
'. '.
'
' '
3.4
4.1
2.8
5.4
79.0
73.6
78.8
2.7
76.1
Australia
Germany
''
''
South
Africa
77'4
1.0
76.4
6.3
77.1
0.1
, , 70.8
''
76.8
2.8
Poland
I
' '
'
' '
Sweden
Finland
76.7
76'4
73.6
76.3
Spain
::
s9.3
''
Italy
76.0
Brazil
Denmarl<
Chin
75.7
'74.5 '
; '
72.6
''
a Norway
India
Belgium
France
SaudiArabia
75.3
''
71.1
' '
74 5
Singapore
Hong Kong
::
69.5
.
Argent na
.:
74.5
Japan
Mexico
UAE
, :
69.7
''
'
: :69.4
76.8
7.0
: :s9.4
1.5
' '
''
61;
'
: 68.4
73.4
''
, :
'
:
6
';
73.
20
40
60
66.6
S4'.7
'
6&.3
, 9.2
' 73.7
'
80
CEI{On a Scale of 100)
3.1
76'4
4.2
5.0
100
4.8
6.4
2.5
:
:
6
9
.
6
4.1
3.4
5.0
(0.4)
4.2
:
7
(7.4)
'
''
'
;
7.5
(8.0)
1.9
(8.4)
2016
2015
Source: Capgemi:liF1181lCial Services Analysis, 2016; 2016RetailBanking vl'.lice of the Customer Survey, Capgemi:liGlobalFinancial Se!vices
50
Figure B2: Positive Customer Experience,by Country (%),2015-2016

Global Average
Netherlands
Czech Republic
48.1% (2015)
54.7% (2016)
'
70.6
56.3
'
'
61.4
Switzerland
14.3
67.0
5.6
66.8
Austria
Russia
Percentage Point Change
2015-2016
'
6.9
59.9
'
'
'
'
10.8
66.7
55.8
64.8
9.9
6.1
Canada
54.9
Portugal
Germany
Poland
13.0
63.0
'
13.8
56.9
'
63.0
Sweden
11.5
16.0
.o
62.3
U.S.
.4
:
'
61.6
50.1
'
60.7
:,t4.7 :
'
'
'
Turkey
'
60.5
54.9
: 52.1
'
5.6
'
8.0
60.1
59.5
Ital
y
7.6
:51.9
U.K.
;
Finland
m Denmark
South Africa
Australia
Norway
Brazil
.o
49.8 58.2
'
Belgiu
10.4
58'4
'
:45.4:
46.
''
8.4
56.7
11.2
55.9
9.0
55.6
?0.3
'
'
55.0
:51.3
: ' 53.9
'
4r8 ''
:' 52.4
4.o
5.3
3.7
11.1
10.4
France
India China Argentina Hong Kong
SaudiArabia
Japan
: 52.3
: 46.
Mexico
39.Z
'
'
'
'
' 47;1
43.8 ':
38.1 :
'
4?,7 '
33.4
34.7
'
''
'
'
40.?
''
38.1'
28.1
'
'
'
'
'
''
'
6.2
7.9
56.6
5.7
8.0
(17.5)
4
.
o
'
'
8.3
12.
2
41 7
59.5
(18.5
'
36.0 '
36.1
35.7 '''
'
'
Singapore
Spain
UAE
28.4
0
20
34.9
40
:'
'
'
'
(0.1)
'
'
'
'' 53.3
'
:'
'
60
Customers with Positive Experience (%)

Source:
(17.6)
6.5
80
2016
2015
CapgeminiFinancialSe!vices Analysis, 2016;2016 RetIBanllg \,bice of the Customer SuNey,CapgeminiGlobalF11811Cial Services
2016 Global Retail Banking Voice

of the Customer Survey
A global survey of customer attitudes toward retail
banking forms the basis of the tenth annual World
Retail Bankjng Report. Our comprehensive Retail
Banking Voice of the Customer Survey polled over
16,000 retailbanking customers in 32 countries. The
survey sought to gain deep insight into customer
preferences,
expectations, and behaviors with respect to specific
types of retail banking transactions. The survey
questioned customers on their general satisfaction
with their bank, the importance of specific channels for
executing different types of transactions, and their
satisfaction with those transactions, among other
factors. The survey also questioned customers on their
likelihood to stay,refer a friend, purchase another
product from their bank, why they choose to stay
with/change their bank, and their behavior toward
using products/services from fintech firms. We
supplemented these detailed findings with in depth
interviews with senior banking executives around the
world.
53
Capgemini's Proprietary
Customer Experience Index (CEI)
The responses from the global Retail Banking Voice of
the Customer Survey,which analyzed customer
experiences across 80 data points, provide the
underlying input for our proprietary CEI.The
CEIcalculates a customer experience score that can be
analyzed across a number of variables. The scores
provide insight on how customers perceive the quality of
their bank interactions. They can be dissected by
product, channel and lifecycle stage,as well as by
demographic variables, such as country, age,
investable assets and comfort level with technology. The
result is an unparalleled view of how customers
regard their banks, and the specific levers banks can
push to increase the number of positive experiences
for customers. The index provides a foundation for
banks to develop an overall retail delivery strategy that
will increase satisfaction in ways that are most
meaningful to customers.
54
About Us
Capgemini
CO NS ULT ING .TECH N OLOGY.0 U!SOUR CING
With more than 180,000 people inover 40 countries, Capgemini is one of the world's foremost providers of
consulting, technology and outsourcing services. The Group reported 2015 global revenues of EUR 11.9 billion.
Together with its clients, Capgemini creates and delivers business, technology and digital solutions that fit their
needs, enablingthem to achieveinnovation and competitiveness. A deeply multicultural organization,
Capgemini has developed its own way of working, the Collaborative Business Experience,and draws on
Rightshore, its worldwide delivery model.
Capgemini's Financial Services Strategic Business Unit brings deep industry experience, innovative service
offerings and next generation global delivery to serve the financialservices industry. With a network of 24,000
professionals - 11,000+ in India dedicated to Financial Services - and more than 900 clients worldwide,
Capgemini collaborates withleading banks, insurers and capital market companies to deliver business and IT
solutions and thought leadership which create tangible value.
Learn more about us at
www.capgemini.com/financialservices. Rightshorei& is a
trademark belonging to Capgemini.
.....Ef ma
A global non-profit organization, established in 1971 by banks and insurance companies, Efma facilitates
networking between decision-makers. It provides quality insights to help banks and Insurance companies make the
right decisions to foster innovation and drive their transformation.Over 3,300 brands in 130 countries are Efma
members.
Headquarters in Paris. Offices in London, Brussels, Barcelona, Stockholm, Bratislava, Dubai, Mumbai, and
Singapore. Visit www.efma.com.
2016 Capgemini
All Rights Reserved.Capgeminiand Elma,their services mentioned hereinas well as theirlogos,are trademarks or
registered trademarks of their respective companies.All other company, product and service names mentioned are the
trademarks of their respectiveowners and areused hereinwithno intentionof trademark infringement. No part of this
document may bereproduced or copied in any form or by any meanswithout written permission from Capgemini.
Disclaimer
Theinformation contained hereinis general in nature andis not intended,and should not be construed,as
professionaladvice or opinion provided to the user.This document does not purport to be a complete statement of
the approaches or steps,whichmay vary accordingly to individual factors and circumstances,necessary for a business to
accomplish any particular business goal.This document is provided for informational purposes only;it is meant solely
to provide helpfulinformation to theuser.This documentis not a recommendation of any particular approach and
should not be relied upon to address or solve any particular matter.The text of this document was originally written in
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disclaim any responsibility for translation inaccuracies.The information provided herein is on an 'as-is' basis.
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Acknowledgements
We would like to extend a specialthanks to all of the banks. fintech firms and individuals who participated in our
Banking Executive Interviews and Surveys.
The following companies are among the participants who agreed to be publicly named:
ABN Amro Bank. Netherlands: ADCB. UAE: Al Khalil Commercial Bank. Qatar: Alior Bank S.A.. Poland: ANZ Bank.
Australia: Associated Bank. U.S.: Banca Agricola Commerc1ale. Italy: Banca Carige. Italy: Banca Mediolanum. Italy:
Banca Mps Leasing e Factoring. Italy: Banca Popolare di Milano. Italy: Banca Popolare di Sondrio, Italy: BancABC.
Botswana: Banco ActivoBank. Portugal: Banco Bradesco. Brazil: Banco de Credito del Peru. Peru: Banco de Sabadell.
Spain: Banco Popular. Spain: Banco Santander. Spain: Banco Supervielle. Argentina: Ban10 Loans. Australia:
Bank Central Asia. Indonesia: Bank Millennium. Poland: Bank of Ireland. Ireland: Bank Simpanan Nasional, Malaysia:
Bankhaus August Lenz & Co. AG, Germany: Bank1a. Spain: Bankinter. Spain: Banque L1bano-Frani;:aise. Lebanon:
Barclays. UK: BCDC. Congo: BCP. Peru: Bendigo and Adelaide Bank. Australia: BIT Bank. Lebanon: BNL - BNP Paribas.
Italy: BNP Paribas Fortis. Belgium: BNP Paribas. France: Caixa Econ6mica Federal, Brazil: Cassa d1 Risparm10 d1 Cento.
Italy: Catalunya Banc. Spain: CBW Bank, U.S.: CheBanca'.. Italy: CIB Bank ZRT. Hungary: CIBC. Canada: Credit Andorra.
Andorra: Credit Europe Bank Ltd.. Russia; Credit Libanais. Lebanon: Credit Union Australia Limited, Australia: Credito
Emiliano. Italy: Crelan. Belgium: Danske Bank, Denmark: Des1ard1ns. Canada: Deutsche Bank, Italy: DNB, Norway:
Ecobank. Cameroon: Erste Group Bank AG, Austria: Erste&Steiermarkische Bank d.d.. Croatia: F1deuram. Italy: First
National Bank. South Africa: Groupama Banque. France: ING. Belgium: lsbank. Turkey: JSC TBC Bank. Gecrgia; Laxmi
Bank Limited. Nepal: Maritime Bank. Vietnam: Millennium BCP. Portugal: MoneyPlace. Australia: Moula. Australia; National
Australia Bank. Australia: National Bank Of Egypt. Egypt; National Bank of Greece. Greece: NIBC. Netherlands: NLB
banka AD Beograd. Serbia: NLB Montenegrobanka. Montenegro: Novo Banco. Portugal: Ocean. Australia: OTP Bank.
CEE:
OTP Banka Slovensko. Slovakia: PKO Bank Polski. Poland: Privredna banka Zagreb d.d.. Croatia: Raiffeisen Bank
International, Austria: Raiffeisen Bank. Kosovo: Raiffeisen Bank. Romania: Rosbank, Russia: Royal Bank of
Ca11ada. Canada: Sandnes Sparebank, Norway: Santander Consumer Bank. Norway: Sberbank CZ, Czech
Republic:
Sberbank of Russia, Russia: Skandinaviska Enskilda Banken AB, Sweden: Smartika, Italy; SpareBank 1 Ailiansen,
Norway: SpareBank 1 Group, Norway: Sparebanken Hedmark. Norway: Sumitomo Mitsui Banking Corporation. Japan:
Swedbank. Baltic: The Bank of Tokyo-Mitsubishi UFJ. Ltd. Japan: Turkish Economy Bank, Turkey: UniCredit Bank Austria.
Austria: UniCredit Bulbank, Bulgaria; Unicred1t, Italy: Union Bank of Cameroon, Cameroon: United Amara Bank, Myanmar:
United Bank Limited. Pakistan: United Bulgarian Bank, Bulgaria: Vaba d.d. banka Varazd1n. Croatia: VTB 24, Russia
and CIS: Westpac Group, Australia: Westra Wermlands Sparbank. Sweden: WIZZIT Bank, South Africa: XacBank.
Mongolia: and Yap1 Kred1 Bank. Turkey.
We would also like to thank the following teams and individuals for helping to compile this report:
William Sullivan and Vamsh1 Suvarna for their overall leadership for this year's report: Amit Kumar. Av1nash Saxena. and Chris Cost
Capgem1ni's Global Retail Banking network for prov1d1ng their insights. industry expertise and overall guidance:
Karlik Ramakrishnan. Nilesh Vaidya. Don Vadakan. Michael Leyva. Erik Van Druten. Kishen Kumar. Andrew
Diaper.
Philip Gomm. Kev Hendy, Ravi Pichan. Manrsh Grover. Vi1aydeep Singh, Sharon Rode. Mania Ferrari. Jessica lngram1.
Mercedes Chacon Otero. Pascal Spelier. Rob Griffiths, Richard Hechenb1chler. Joel Oliveira. Freek Roelofs.
Shinichi Tonomura. Masao Tabata. Yasunori Ta1ma. Takeh1to Yamada. Fredrik Borchgrev1nk. Marianne Sorlie, Johan
Bergstrom. Jon Wallen. K1etil Gudmundsen. Christian Morlacch1. Bruna Rigato. Antonella Taglient1.
Francesco Spinelli. Christian Morlacch1. Alberto Casanr. Francesco Chevallard. Pratheesh Kookanath. and Kartik Pawan.
Karen Schneider and Vanessa Baille for their overall marketing leadership for the report and the Global Product
Marketing and Programs. Shared Serv,ces. Corporate Communications and Field Marketing Teams for producing and
the report Jyoti Goyal. Kal1das
Chitambar, Partho Sarathi Bhattachar1ee. Sa1 Bobba, Suresh Chedarada. Kanaka Donk1na. Mary-Elien Harn. Manisha Jaiswal. Mart
launching
Erin Riemer. and Suresh Sambandhan.

Vincent Bastid. Kanne Coutinho. Philippe Van Fraechem. and the Elma team for their collaborative sponsorship.
marketing. and continued support.
For moreinformation,please visit

www.worldretailbankingreport .com
www.efma.com/wrbr
Please contact:
Capgemini:banking@capgemini.co
m Efma:wrbr@efma .com
For press inquiries, please contact:
Benjamin Pfeffer (EMEA) at bpfeffer@webershandwick.com
or +44 (0) 207 067 0461
Sophia Powe (North America and Rest of the
World) at spowe@webershandwick.com or +1 212
445 8110
Mary-Ellen Ham (Capgemin at mary-ellen.harn@capgemini.com

or +1704 4904146
Boris Plantier (Efma) at boris@efma.com or +33 147 42 67
69
Capgemini

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Capgemin

World RetailBanking Report 2016

Customer Experience Rises, but Not Enough to Greatly Improve

a. Retail banks improved their position on Capgeminl's Customer Experience Index by

Fintech Firms Gain Prominence

World RetailBanking Report 2016

Introduction - Evolving Toward

World Retail Banking Report 2016

Customer Experience Trends

The increase in CEIwas broad-based, occurring

Since 2011,Capgeminihas delivered insight into the

Banks inthe digitally saturated Netherlands market

From 2015 to 2016, the CEIrose by 2.9 points, likely

Figure 1.1:Customer Experience Index,Top and Bottom 5 Countries based on CEI,2015-2016

Changein Rank based on CEI,2015-2016

World RetailBanking Report 2016

Sweden also witnessed an improvement in CEI by

One of the few consistencies inthe country rankings

Figure 1.2:Positive Customer Experience,by Region (%),2014-2016

Netherlands (70.6%) and Czech Republic (67.0%)

Positive CE by Demographic: Underscoring the high

51.2% 58.5% 67.1%

47.7% 62.5% 75.7%

59.4% 63.7% 69.7%

43.5% 44.6% 45.1%

40.8% 44.4% 54.6%

36.9% 45.7% 50.1%

Gen Y refers to people born between 1981 and 2000

Gen X refers to people born between 1961and 1980

Other age groups refers to people aged 55 years and older

World RetailBanking Report 2016

Positive CE by Channel:Customer experience levels

has decreased from 65.1% in 2015 to 59.4% in

Figure 1.4:Changes in ChannelExperience and Usage (%),2015-2016

Customers Using Channels at Least Weekly

----------------- ' ------------------

Increase in Customers Decrease in

Country boundaries on diagram are approximate and representatiw only

Though social media progressed slowly inusage

Profitable Customer Behaviors Lag

Loyalty was even less evident among Gen Y

World RetailBanking Report 2016

a modest 2.2 percentage points, it remained the

In terms of referrals, only 38.4% of respondents, up

Percentage Point Decreasefrom 2015

Percentage Point Increase from 2015

When it comes to purchasing additional products,

While Gen Y customers did not distinguish themselves

Customers Likelyto Stay,2015-2016

One way for banks to promote more profitable

Simply put, positive experiences pay off in the form of

World RetailBanking Report 2016

The overall movement up the CEIscale, however,is

Fintech Firms Make Gains

Penetration is highest inthe emerging markets. In Latin

Figure 2.1:Banking Customers' Usage of Fintech Firms, by Region (%), 2016

While younger customers are more likely to turn to

Despite some pockets of resistance, fintech

World RetailBanking Report 2016

Other Age Groups

Gen Y morethan Other Age Groups

Fintech Firms Gain Customer Trust

Rising levels of trust in fintech firms may threaten